ACT No. XIX of 2010 AN ACT to amend various financial services laws BE IT ENACTED by the President, by and with the advice and consent of the House of Representatives, in this present Parliament assembled, and by the authority of the same, as

I assent.

(L.S.) G eorge A bela

President

26th November, 2010

ACT No. XIX of 2010

AN ACT to amend various financial services laws

BE IT ENACTED by the President, by and with the advice

and consent of the House of Representatives, in this present

Parliament assembled, and by the authority of the same, as

follows:-

The short title of this Act is the Various Financial

Services Laws (Amendment) Act, 2010.

PART I

AMENDMENT OF THE MALTA FINANCIAL SERVICES

AUTHORITY ACT

This Part amends and shall be read and construed as one

with the Malta Financial Services Authority Act, hereinafter in this

Part referred to as “the principal Act”.

Article 2 of the principal Act shall be amended as

follows

(a) the definition

“financial

services”

shall

be

substituted as follows

“ “financial services” means the business of credit

and financial institutions, the business of insurance and

the activities of insurance intermediaries, the provision

of investment services and collective investment

schemes, pensions and retirement funds, regulated

markets, central securities depositories and such other

areas of activity or services as may be placed under the

supervisory and regulatory competence of the Authority

by the Minister or by any other law;”; and

(b) immediately after the definition “prescribed” there

shall be inserted the following new definition

“ “Registrar of Companies” means the person Cap. 386.

appointed pursuant to article 400 of the Companies Act

and who shall be a senior official of the Authority;”.

Article 4 of the principal Act shall be amended as Amendment of article

(a) In subarticle (2) thereof, immediately after the

words “monitoring areas or activities in the financial services

sector” there shall be added the words “and the registration of

commercial partnerships”; and

(b) in subarticle (4) thereof, for the words “In this Act,

“Malta’s international commitments” shall have the same

meaning assigned to the term under article 2 of the Investment

Services Act.”, there shall be substituted the words “In this

Act, “Malta’s international commitments” shall mean Malta’s

commitments, responsibilities and obligations arising out of

membership of the European Union and membership of, or

affiliation to, or relationship with, any international, global or

regional organisations or grouping of countries or out of any

treaty, convention or other international agreement, however

called, whether bilateral, multilateral including Memoranda

of Understanding, to which Malta is a party.”.

Immediately after article 4 of the principal Act there shall Addition of new

be inserted the following new article

4A. The granting of a licence is a concession

and a revocable privilege, and no holder thereof shall

be deemed to have acquired any vested rights therein or

thereunder. The burden of proving the licence holder’s

qualifications to hold a licence shall rest at all times on

the licence holder. In this subarticle, licence includes

and applies to any licence and authorisation, however

designated, issued by the Authority under any legislation

for whose administration it is responsible.”.

Immediately after article 7 of the principal Act, there

shall be added the following new article 7A

(1) The Board of Governors shall also act

as the Listing Authority established under the Financial

Markets Act and shall perform the functions set out in

Part III of the said Financial Markets Act.

(2) The Board of Governors when acting

as the Listing Authority may delegate in writing any of

its functions and powers, including the power to take

decisions on behalf of the Board, on such matters and

subject to such conditions and modalities as may be

specified in the delegation, to the chairman or one or

more of the members of the Board, as may be specified.

Any decision so taken shall be ratified by the other

members of the Board at the first opportunity.

(3) The Board of Governors when acting as

the Listing Authority may delegate in writing any of its

decisions relating to the admissibility to listing to any

one or more of the Listing Committees established under

the Financial Markets Act. Any such delegation shall

be subject to such terms, conditions and restrictions as

the Board of Governors may think fit.”.

7. Article 9 of the principal Act shall be amended as

(a) in subarticle (1) thereof, immediately after the

words “the Authority.”, there shall be added the words “The

Co-ordination Committee shall act as the point of contact and

the principal channel of communication and co-ordination

between the Board of Governors, the Supervisory Council

and the Board of Management and Resources.”; and

(b) for subarticle (2) thereof, there shall be substituted

the following

“(2) The Co-ordination Committee shall consist

of the Chairman of the Board of Governors, who

shall preside thereat, the Director-General, the Chief

Operations Officer of the Authority, the Director of the

Legal Office and the Registrar of Companies.”.

In subarticle (2) of article 10 of the principal Act, for the Amendment of article

words “within the Authority for Banking, Company Compliance, Act.

Insurance, Investment Services and for any other area of financial

services under the regulatory supervision of the Authority.”,

there shall be substituted the words “within the Authority for

Authorisation, the supervision of Banking, Insurance and Pensions,

Securities and Markets, for Regulatory Development and for any

other area of financial services under the regulatory supervision of

the Authority as may be determined by the Board of Governors.

The Supervisory Council may, with the approval of the Board

of Governors, from time to time make internal arrangements to

authorise one or more of the aforementioned Directors to sign a

licence, category of licences or any other form of authorisation as

it may deem appropriate.”.

In subarticle (1) of article 11 of the principal Act, for the Amendment of article

words “the Authority including business development and ancillary 11

services”, there shall be substituted the words “the Authority

including human resources, business development and ancillary

services”.

Subarticle (1) of article 13 of the principal Act shall be Amendment of article

amended as follows

(a) for the words “a Consumer Complaints Manager

and such other officers”, there shall be substituted the words

“Directors, a Consumer Complaints Manager and such other

officers”; and

(b) for the words “the Chief Operations Officer and the

Consumer Complaints Manager”, there shall be substituted

the words “the Chief Operations Officer, Directors and the

Consumer Complaints Manager”.

Article 16 of the principal Act shall be amended as Amendment of article

follows

(a) for subarticle (1) thereof, there shall be substituted

the following

“(1) (a) Without prejudice to any other function

and power under this or any other law, the Authority

shall, in the exercise of its functions and powers under

this Act, have the right to reasonable access and entry to

any business premises and, or offices of a licence holder,

access to any relevant documentation and, or records

of a licence holder, including access to any telephonic

or other records and access to any other information

relating or pertaining to the activities licensed or

authorised by the Authority or otherwise falling under

its supervisory or regulatory functions. The Authority

shall also have the right to issue orders for the freezing

of funds and, or other assets including bank accounts in

the name of the licence holder or any other third party

or parties as may be indicated and for such time and

under such conditions as the Authority may set out in

writing. The order may also prohibit a licence holder

from transferring, disposing or losing possession of any

such funds or assets. These orders may also be issued

at the request of a foreign enforcement or supervisory

authority.

(b) The directors and managers, by whatever

name designated, or any other persons who are or have

been in charge of the operations or activities falling

under the supervisory or regulatory functions of the

Authority shall assist and shall collaborate with the

Authority in order to enable it to discharge its functions,

and shall collate and transmit without any undue delay

such information and documentation as the Authority

may reasonably request from time to time.

(c) The Authority may exercise the powers

under this article notwithstanding articles 17A and 17B

of this Act and any provision as may be contained in any

other law.”; and

(b) immediately after subarticle (6) thereof,

there shall be inserted the following new subarticles

“(7) Notwithstanding any provision as

may be contained in any other law for whose

administration the Authority is responsible and

where circumstances so warrant, the competent

authority may issue reprimands, warnings or take

other similar disciplinary sanctions or measures of

whatever type as may be deemed warranted by the

circumstances and the nature and seriousness of the

breach and wrongdoing.

(8) Any administrative or disciplinary

sanction or measure, of whatever type, including

reprimands or warnings, imposed or decided by the

Authority under any law for whose administration

it is responsible, shall be subject to publication

in such medium and in such manner and for such

duration as may be deemed warranted by the

circumstances and the nature and seriousness

of the breach or wrongdoing. The Board of

Governors may from time to time establish

policies and guidelines regarding the publication

of administrative sanctions and disciplinary

measures.”.

Article 17 of the principal Act shall be amended as Amendment of article

(a) in paragraph (a) of subarticle (2) thereof,

immediately after the words “matters related to the regulation

and supervision of financial services”, there shall be added the

words “and the registration of commercial partnerships”; and

(b) immediately after subarticle (2) thereof, there shall

be inserted the following new subarticle

“(3) Information divulged to the Authority

under conditions of confidentiality in pursuance to a

request within the terms of a bilateral or multilateral

agreement, memorandum of understanding or other

similar document or arrangement for the exchange

of information or for any other form of collaboration

with overseas regulatory authorities shall be treated

as confidential and no Court or Tribunal may order

the disclosure of such information unless the prior

written approval of the overseas regulatory authority is

obtained.”.

In the second proviso to subarticle (9) of article 21 of Amendment of article

the principal Act, for the words “two hundred and thirty-two euro 21

and ninety-four cents (232.94)” there shall be substituted the words

“two hundred and thirty-two euro and ninety-four cents (232.94)

and from any reprimand, warning or other similar disciplinary

sanction or measure.”.

In article 28 of the principal Act, for the words “three

months after the close of each financial year” there shall be

substituted the words “four months after the close of each financial

year”.

For article 29 of the principal Act, there shall be

substituted the following

“29. The Authority, the members of the Board

of Governors, of the Co-Ordination Committee, of the

Supervisory Council, of the Board of Management and

Resources and of the Legal Office and the officers and

employees of the Authority, shall not be liable in damages

for anything done or omitted to be done in the discharge or

purported discharge of any function under this Act or any

other Act administered by the Authority, or otherwise in the

exercise of their official duties, unless the act or omission is

shown to have been done or omitted to be done, as the case

may be, in bad faith.”.

PART II

AMENDMENT OF THE FINANCIAL MARKETS ACT

This Part amends and shall be read and construed as one

with the Financial Markets Act, hereinafter in this Part referred to

as “the principal Act”.

Article 2 of the principal Act shall be amended as

follows

(a) for the definition “Listing Authority” there shall be

substituted the following

“ “Listing Authority” means such person or body

appointed under the Malta Financial Services Authority

Act to perform the functions set out in Part III of this

Act;”;

(b) immediately after the definition “multilateral

system” there shall be inserted the following new definition

“ “overseas central securities depository” means a

person authorised to provide the same or substantially

similar services to those stipulated in article 26 in a

recognised jurisdiction.”; and

(c) immediately after the definition “quoted company”

there shall be inserted the following new definition

“ “recognised jurisdiction” means

(a) a Member State;

(b) an EEA State;

(c) any country that is a member of the

Organization for Economic Co-operation and

Development (OECD) established in 1961;

(d) a country that is a signatory of

the IOSCO Multilateral Memorandum of

Understanding; or

(e) any other jurisdiction where the central

securities depository or the overseas central

securities depository is regulated and with whom

the competent authority has a Memorandum of

Understanding covering securities;”.

In article 4 (1)(b) of the principal Act, for the words “an Amendment of article

authorised investment exchange for the purposes of this Act”, there 4 of the principal Act.

shall be substituted the words “an authorised regulated market for

the purposes of this Act”.

In article 11 of the principal Act, for the words “There Amendment of article

shall be a Listing Authority having the following functions:”, there

shall be substituted the words “The Listing Authority shall have the

following functions:”.

Immediately after article 11 of the principal Act there Addition of new

shall be inserted the following new article 11A

11A. (1) The Listing Authority shall also have

the function of

(a) authorising the admissibility to trading

of financial instruments on a second tier market

which qualifies as a multilateral trading facility

within the meaning of the Investment Services Act

and which operates in or from Malta;

(b)

issuing rules which may include

(i) conditions and requirements that

need to be satisfied by an applicant to be

admissible to trading on a multilateral trading

facility;

(ii) conditions and requirements which

the applicant must continue to satisfy if its

financial instruments are to remain traded on

a multilateral trading facility;

(iii) the manner and form in which an

application for admissibility to trading on a

multilateral trading facility must be made to

the Listing Authority and any fees payable in

connection therewith;

(iv) certain

minimum

disclosure

requirements to be set out in the offering

document issued by issuers seeking

admissibility to trading on a multilateral

trading facility;

(v) any other provisions which may

be required for the better implementation

and purposes of this article and anything that

is incidental to or connected with any of the

matters above, as the Listing Authority may

consider appropriate.

(2) Where any person contravenes or fails to

comply with any provision of this article or any rules

issued thereunder, the Listing Authority may by notice in

writing and without recourse to a court hearing impose

on any such person or persons, as the case may be, an

administrative penalty which may not exceed ninety-

three thousand and one hundred and seventy-four euro

and ninety-four cents (93,174.94).

(3) The operator of a multilateral trading facility

shall comply immediately with any instruction from the

Listing Authority to suspend or remove an instrument

from trading.”.

Article 14 of the principal Act shall be amended as

(a) for the marginal note “Listing Committee”, there

shall be substituted the words “Listing Committees”;

(b) in subarticle (1) thereof, for the words “The Listing

Authority may establish a committee, hereinafter referred to

as the “Listing Committee” ”, there shall be substituted the

words “The Listing Authority shall establish a committee,

hereinafter referred to as the “Listing Committee”,”;

(c) for subarticle (2) thereof, there shall be substituted

the following

“(2) The Listing Committee shall be composed

of up to five members and shall be appointed for a

term not exceeding three years. The Listing Committee

shall make recommendations to, and otherwise assist,

the Listing Authority in the admissibility to listing

of financial instruments and shall perform such

other specific functions as the Listing Authority may

from time to time delegate in writing. The Listing

Committee shall have such powers and observe such

procedures as the Listing Authority may establish, and

shall periodically report on its activities to the Listing

Authority. The Securities and Markets Supervision Unit

of the Authority shall also assist and give advice to the

Listing Committee on listing matters.”; and

(d) for subarticle (3) thereof, there shall be substituted

the following

“(3) The Listing Authority may appoint

additional listing committees for the purpose of

assisting the Listing Committee in the performance of

such specific functions as the Listing Authority may

delegate in writing. Such additional listing committees

shall be set up and shall be subject to the conditions and

requirements set out in subarticle (2).”.

Article 28 of the principal Act shall be amended as

follows

(a) in subarticle (1) thereof, for the words “in a central

securities depository, may be created and, or transferred by

an entry on the register maintained in a central securities

depository and no instrument in writing shall be required

for this purpose”, there shall be substituted the words “in a

central securities depository or an overseas central securities

depository, may be created and, or transferred by an entry on

the register maintained in the central securities depository or

the overseas central securities depository and no instrument in

writing shall be required for this purpose”;

(b) in subarticle (2) thereof, for the words “in a

central securities depository, may be held or evidenced in

a dematerialised or uncertificated form.”, there shall be

substituted the words “in a central securities depository or

an overseas central securities depository, may be held in a

dematerialised or uncertificated form.”;

(c) in subarticle (3) thereof, immediately after the

words “duly registered with a central securities depository”,

there shall be added the words “or an overseas central

securities depository”; and

(d) in subarticle (4) thereof, for the words “duly

authorised in terms of this Part”, there shall be substituted the

words “or an overseas central securities depository”.

In article 29 of the principal Act, the words “authorised

under this Part”, shall be deleted.

Article 30 of the principal Act shall be amended as

follows

(a) in subarticle (1)(h) thereof, for the words “for an

authorisation which may be subject to such variations,”,

there shall be substituted the words “for an authorisation or

from any provision of this Act which may be subject to such

variations,”; and

(b) in subarticle (2) thereof, for the words “classes

of financial instruments and for different circumstances or

purposes”, there shall be substituted the words “classes of

financial instruments, overseas central securities depositories

and for different circumstances or purposes”.

In article 31 of the principal Act, for the words “central

securities depositories authorised under this Part and on others”,

there shall be substituted the words “central securities depositories

and on others”.

Article 49 of the principal Act shall be amended as

(a) in paragraph (a) thereof, for the words “for the

better regulation of regulated markets and central securities

depositories” there shall be substituted the words “for the

better regulation of central securities depositories, credit

rating agencies and regulated markets”;

(b) in paragraph (d) thereof, for the words “relating

to regulation of regulated markets” there shall be substituted

the words “relating to regulation of credit rating agencies,

regulated markets”; and

(c) for paragraph (e) thereof, there shall be substituted

the following

“(e) to transpose, implement and give effect to the

provisions and requirements of Directives, Regulations

and any other legislative measures of the European

Union requiring transposition and, or implementation,

as they may be amended from time to time, including

any implementing measures that have been or may be

issued thereunder and relating to credit rating agencies,

regulated markets and, or the admissibility to listing

of financial instruments thereon and others as may be

specified therein or to any other matter falling within the

terms of this Act.”.

In article 50 of the principal Act, immediately after

the words “in terms of article 45”, there shall be added the words

“or on a regulated multilateral system or an equivalent regulated

market or multilateral system in a non-Member State or non-EEA

PART III

AMENDMENT OF THE COMPANIES ACT

This Part amends and shall be read and construed as one

with the Companies Act, hereinafter in this Part referred to as “the

principal Act”.

In article 66A of the principal Act, for the words “This

article shall apply to a partnership en commandite or limited

partnership the capital of which is divided into shares” there shall

be substituted the words “This article shall apply to a partnership

en commandite or limited partnership the capital of which may be

divided into shares”.

Immediately after article 84C of the principal Act, there

shall be added the following new article

84D. The Minister, in consultation with the

Minister responsible for finance and acting on the advice

of the competent authority under the Insurance Business

formation etc.

of incorporated Act or the competent authority under the Investment

cell companies Services Act, may make regulations which provide for

the formation, constitution, authorisation and regulation

of incorporated cell companies and incorporated cells

as limited liability companies with separate legal

personality under this Act, and which make it possible

for such companies to carry on any financial services

business as may be prescribed, and for all matters

ancillary thereto or that may arise in connection

therewith. Regulations issued in terms of this article may

also provide for the applicability or inapplicability of, or

the total or partial exemption from, any of the provisions

of this Act or of any other law in force to incorporated

cell companies and incorporated cells subject to any

modifications, variations or conditions as may be

specified.”.

Article 118 of the principal Act shall be amended as

(a) in subarticle (1) thereof, for the words “may be

made by private writing”, there shall be substituted the words

“shall be made in writing”; and

(b) immediately after subarticle (2) thereof, there shall

be added the following new subarticle

“(3) This article shall not apply to shares or

debentures of a public company held or evidenced in a

dematerialised or uncertificated form within the meaning

of the Financial Markets Act.”.

In subarticle (3) of article 120 of the principal Act, for

the words “as the case may be.”, there shall be substituted the

words “as the case may be

Provided that in the case of public companies whose

shares are admitted to listing on a regulated market or on

an equivalent market in a non-Member State or non-EEA

State, the delivery to the Registrar shall take place within 90

days after the date on which a transfer of any such shares is

registered with the company, and within 90 days from the date

on which any such shares transmitted causa mortis have been

registered in the name of the person entitled to be registered

as the holder thereof.”.

Immediately after article 126 of the principal Act, there

shall be added the following new article 126A

126A. (1) Notwithstanding the provisions

of articles 123 and 124 of this Act, where shares or

debentures of a public company are held or evidenced

in a dematerialised or uncertificated form within the

meaning of the Financial Markets Act, the company shall

remain responsible for the proper keeping of the register

and shall keep a copy of all entries relating to registered

shareholders and registered holders of debentures held

by the central securities depository or by an overseas

central securities depository.

(2) For the purposes of this article “central

securities depository” and “overseas central securities

depository” shall have the same meaning assigned to

them in article 2 of the Financial Markets Act.”.

Immediately after paragraph (b) of subarticle (2) of

article 209 of the principal Act, there shall be added the following

new paragraph

“(c) allow any of its securities to be admitted to listing

or trading.”.

Subarticle (3) of article 335 of the principal Act shall be

In paragraph (b) of subarticle (6) of article 345 of

the principal Act, for the words “referred to in article 349, at

the registered office of the acquiring company:” there shall be

substituted the words “referred to in article 349, in accordance with

the provisions of that article:”.

For article 346 of the principal Act, there shall be

substituted the following

“346. (1) The directors of each of the amalgamating

companies shall

(a) draw up a detailed written report explaining

the draft terms of the merger and setting out the legal

and economic grounds for them, in particular the share

exchange ratio, and shall describe any special valuation

difficulties which have arisen; and

(b) inform the general meeting of their company

and the directors of the other amalgamating company

or companies so that they may inform their respective

general meetings, of any material change in the assets

and liabilities between the date of preparation of the draft

terms of merger and the date of the general meetings

which are to decide on the draft terms of merger.

(2) The report referred to in paragraph (a)

of subarticle (1) hereof and the information referred to in

paragraph (b) of subarticle (1) hereof shall not be required

if all the shareholders and the holders of other securities

conferring the right to vote of each of the amalgamating

companies have so agreed.”.

In article 347 of the principal Act, for the words “shall

not apply.” there shall be substituted the words “shall not apply

where an independent expert’s report on the draft terms of merger

is drawn up.”.

Article 349 of the principal Act shall be amended as

follows

(a) in subarticle (1) thereof -

(i) in paragraph (c), for the words “an accounting

statement” there shall be substituted the words “where

required, an accounting statement”;

(ii) for paragraph (d), there shall be substituted

the following

“(d) where required, the reports of the

directors of the amalgamating companies relating

to the amalgamation;”;

(iii) in

paragraph

(e),

for

the

word

“amalgamation.”, there shall be substituted the words

“amalgamation; and”;

(iv) immediately after paragraph (e), there shall

be inserted the following new paragraph

“(f) for the purposes of paragraph (c) of

this subarticle, an accounting statement shall not

be required if the company publishes a half-yearly

financial report in accordance with listing rules

issued in terms of the Financial Markets Act and

governing such reports, and makes it available to

shareholders in accordance with this subarticle.

Furthermore, an accounting statement shall not be

required if all the shareholders and all holders of

other securities conferring the right to vote of each

of the companies involved in the merger have so

agreed.”;

(b) in subarticle (3) thereof, for the words “mentioned

in subarticle (1).” there shall be substituted the words

“mentioned in subarticle (1), and where a shareholder has

consented to the use by the company of electronic means for

conveying information, such copies may be provided in such

manner.”; and

(c) immediately after subarticle (3) thereof, there shall

be inserted the following new subarticles

“(4) A company shall be exempt from the

requirement to make the documents referred to in sub-

article (1) available at its registered office if, for a

continuous period beginning at least one month before

the day fixed for the general meeting which is to decide

on the draft terms of merger and ending not earlier than

the conclusion of that meeting, it makes them available

on its website.

(5) Subarticle (3) shall not apply if the company’s

website gives shareholders the possibility, throughout the

period referred to in subarticle (4), of downloading and

printing the documents referred to in subarticle (1).”.

Immediately after subarticle (2) of article 354 of the

principal Act, there shall be inserted the following new subarticle

“(3) Where the assets of a company being acquired

include immovable property or rights relating thereto, the

directors of the acquiring company shall cause within one

month from the coming into force of the amalgamation, a

declaratory public deed to be published, containing a detailed

description of the immovable property or rights relating

thereto delivered to the acquiring company, and a true copy

of the said deed shall be lodged with the Registrar within

fourteen days from the enrolment thereof at the Public

Registry.”.

In subarticle (3) of article 357 of the principal Act, for

the words “shall not apply.” there shall be substituted the words

“shall not apply where an independent expert’s report on the draft

terms of merger is drawn up.”.

Article 358 of the principal Act shall be amended as

follows

(a) in subarticle (1) thereof, for the words “which is the

holder of all their shares” there shall be substituted the words

“which is the holder of all their shares and other securities

conferring the right to vote at general meetings”; and

(b) for paragraph (b) of subarticle (3) thereof, there

shall be substituted the following

“(b) within the period mentioned in paragraph

(a), all shareholders of the acquiring company shall be

entitled to inspect at the registered office of the company

the documents specified in article 349(1)(a), (b) and

where required, (c) which those same shareholders

would be entitled to inspect in case of an amalgamation

made in any of the manners specified in article 343;

and the provisions of subarticles (2), (3), (4) and (5) of

article 349 shall apply:”.

For the first paragraph of subarticle (1) of article 359 of

the principal Act, there shall be substituted the following

“(1) Where a merger by acquisition is carried out by a

company which holds 90% or more, but not all, of the shares

and other securities conferring the right to vote at general

meetings of the company or companies being acquired,

the general meeting of the acquiring company need not

approve the acquisition provided the following conditions are

fulfilled:”.

Article 362 of the principal Act shall be amended as

(a) in paragraph (b) of subarticle (6) thereof, for the

words “specified in article 365(1) at the registered office

of that company; and” there shall be substituted the words

“specified in article 365(1) in accordance with the provisions

of that article; and”; and

(b) immediately after subarticle (6) thereof, there shall

be inserted the following new subarticle

“(7) Without prejudice to subarticle (6), approval

of the division by the general meeting of the company

being divided shall not be required if the recipient

companies together hold all the shares and other

securities conferring the right to vote at general meetings

of the company being divided, and the following

conditions are fulfilled

(a) the publication of the statement referred

to in article 401(1)(e), provided for pursuant to the

registration required by virtue of article 361(5)

shall be effected, for all companies involved in

the division, at least one month and not more than

three months before the date fixed for the general

meeting of the company to be divided which is to

decide on the draft terms of division;

(b) at least one month before the date

specified in paragraph (a) all shareholders of all

companies involved in the division shall be entitled

to inspect the documents specified in article 365(1)

in accordance with the provisions of that article;

and

(c) where a general meeting of the company

being divided, required for the approval of the

division, is not convened, the information provided

for by article 363(4) covers any material change in

the assets and liabilities after the date of preparation

of the draft terms of division.”.

In subarticle (2) of article 363 of the principal Act, for

the words “The report shall” there shall be substituted the words

“Where applicable, the report shall”.

For subarticle (3) of article 364 of the principal Act,

there shall be substituted the following

“(3) The report on considerations other than in cash

referred to in article 73(4) and the report on the draft terms of

division drawn up in accordance with subarticle (1) shall be

drawn up by the expert or experts approved under subarticle

(1)

Provided that the report on considerations other than in

cash shall not be required if a written report in accordance

with subarticle (1) has been drawn up.”.

Article 365 of the principal Act shall be amended as

follows

(a) immediately after paragraph (e) of subarticle (1)

thereof, there shall be inserted the following new proviso

“Provided that for the purposes of paragraph (c) of this

subarticle, an accounting statement shall not be required

if the company publishes a half-yearly financial report in

accordance with listing rules issued in terms of the Financial

Markets Act and governing such reports, and makes it

available to shareholders in accordance with this subarticle.”;

(b) in subarticle (3) thereof, for the words “referred

to in subarticle (1).” there shall be substituted the words

“referred to in subarticle (1) and where a shareholder has

consented to the use by the company of electronic means for

conveying information, such copies may be provided in such

manner.”; and

(c) immediately after subarticle (3) thereof, there shall

be inserted the following new subarticles

“(4) A company shall be exempt from the

requirement to make the documents referred to in sub-

article (1) available at its registered office if, for a

continuous period beginning at least one month before

the day fixed for the general meeting which is to decide

on the draft terms of division and ending not earlier than

the conclusion of that meeting, it makes them available

on its website.

(5) Subarticle (3) shall not apply if the website

gives shareholders the possibility, throughout the period

referred to in subarticle (4), of downloading and printing

the documents referred to in subarticle (1).”.

In subarticle (1) of article 400 of the principal Act, for

the words “The Minister shall appoint a person to be Registrar of

Companies and other Commercial Partnerships”, there shall be

substituted the words “The Minister, acting on the advice of the

competent authority under the Malta Financial Services Authority

Act, shall appoint a senior official of the said Authority to be

Registrar of Companies and other Commercial Partnerships”.

PART IV

AMENDMENT OF THE INSURANCE BUSINESS ACT

This Part amends and shall be read and construed as one

with the Insurance Business Act, hereinafter in this Part referred to

as “the principal Act”.

Subarticle (10) of article 69 of the principal Act shall be

PART V

AMENDMENT OF THE INVESTMENT SERVICES ACT

This Part amends and shall be read and construed as one

with the Investment Services Act, hereinafter in this Part referred

to as “the principal Act”.

In sub-paragraph (ii) of paragraph (a) of subarticle (1) of

article 6 of the principal Act, for the words “grant an investment

services licence:” there shall be substituted the words “grant an

investment services licence for the provision of any investment

service other than acting as trustee or custodian in relation to a

collective investment scheme:”.

Subarticle (1) of article 12 of the principal Act shall be

amended as follows

(a) paragraphs (n) and (o) thereof shall be re-numbered

(o) and (p) respectively; and

(b) immediately after paragraph (m) thereof, there

shall be inserted the following new paragraph (n)

“(n) transpose, implement and give effect to the

provisions and requirements of Directives, Regulations

and any other legislative measures of the European

Union requiring transposition and, or implementation, as

they may be amended from time to time, including any

implementing measures that have been or may be issued

thereunder and relating to licence holders and others as

may be specified therein or to any other matter falling

within the terms of this Act;”.

PART VI

AMENDMENT OF THE DUTY ON DOCUMENTS

AND TRANSFERS ACT

This Part amends and shall be read and construed as one

with the Duty on Documents and Transfers Act, hereinafter in this

Part referred to as “the principal Act”.

Immediately after article 41A of the principal Act, there

shall be inserted the following new article 41B

41B. The succession to all assets, rights, liabilities

“Conversion

and obligations of the commercial partnership that has

commercial

been converted, by the commercial partnership resulting

partnership.

from the conversion referred to in article 335(1) of the

Companies Act, shall not give rise to any liability to the

payment of any duty under this Act.”.

In article 64 of the principal Act, for subarticle (1)

thereof, there shall be substituted the following

“(1) No person or authority shall, where a transfer is

subject to duty under this Act, or where a transfer of value is

exempt from duty by virtue of the proviso to article 42B of the

Act, other than paragraph (iv) of the said proviso, register any

transfer, reduction, or allotment of company shares whether

in the name of a transferee or any other person claiming

through or under him or otherwise, before ascertaining that

such transfer, reduction or allotment has been notified to the

Commissioner in accordance with this Act.”.

PART VII

AMENDMENT OF THE INCOME TAX ACT

This Part amends and shall be read and construed as one

with the Income Tax Act, hereinafter in this Part referred to as “the

principal Act”.

For article 45A of the principal Act, there shall be

substituted the following

45A. Notwithstanding anything said in this

“Conversion

Act, where in accordance with the provisions of

commercial

the Companies Act, a company is converted into a

partnership.

commercial partnership en nom collectif or a commercial

partnership en commandite the capital of which is not

divided into shares, the following shall apply

(a) it shall be deemed for all the purposes

of the Income Tax Acts that any balance of

distributable profits allocated to any of the tax

accounts, existing on the day the company ceases

to be a company, to have been distributed by way

of dividend on the said day and the provisions of

articles 61 to 67 shall apply accordingly to such

profits;

(b) subject to paragraph (c) of this article, it

shall be deemed for all the purposes of the Income

Tax Acts that no transfer or acquisition of assets

has taken place and for the purpose of determining

the chargeable income or gains on a transfer of the

said assets by the partnership, the cost and date of

acquisition taken into account shall be the cost and

date as applicable to the company that has been

converted;

(c) where the assets of the company (“the

chargeable company”) include shares in a company

or immovable property situated in Malta which

have been acquired from another company (“the

transferor”) under a transfer which qualified for tax

relief under the provisions of articles 5(9) or 5A(4)

(f), it shall be deemed for the purposes of articles

5(9A) and 5A(12A) that the chargeable company

ceases to be a member of the original group and

the provisions of the said articles shall apply

accordingly;

(d) where the transferor company referred

to in the preceding paragraph is converted into

a partnership, for the purpose of determining

whether the chargeable company referred to

in articles 5(9A) and 5A(12A) ceases to be a

member of the original group, it shall be deemed

that the conversion had not taken place and such

determination shall be made by reference to the

same individuals referred to in paragraph (iii)

of article 5(9) taken into account in determining

whether the chargeable company and the transferor

company satisfied the provisions of paragraphs (i)

and (iii) of article 5(9) on the date of the acquisition

referred to in paragraph (c) above;

(e) where the company has available for set-

off capital losses referred to under article 5(10) of

the Act, such losses shall be carried forward and

set off only against capital gains derived by the

partnership in the manner prescribed in the said

article as would have applied had the conversion

not taken place;

(f) where the company has available for set-

off losses referred to under article 14(1)(g) of the

Act, such losses shall be carried forward and set

off only against the total income derived by the

partnership in the manner prescribed in the said

article as would have applied had the conversion

not taken place.”.

PART VIII

TRANSITIONAL ARRANGEMENTS

(1) The Listing Committee referred to in subarticle (2)

of article 14 of the Financial Markets Act as amended by means

of this Act, shall be a continuation of the Listing Committee

established in terms of the Financial Markets Act, as in force prior

to the coming into force of Part II of this Act.

(2) Any rules issued in terms of article 11A of the

Financial Markets Act shall apply to issuers of financial instruments

already listed on the second tier market, as established in terms of

the Listing Rules, as from the date which shall be determined by

the Listing Authority.”.

Passed by the House of Representatives at Sitting No. 287 of 22nd November,

2010. M ichael F rendo

Speaker

P auline A bela

Clerk to the House of Representatives